Highlights from the Long-Awaited FCPA Guidance

The guidance jointly issued by the Department of Justice and the Securities & Exchange Commission on Wednesday on the Foreign Corrupt Practices Act isn’t a difficult read, and anyone who practices in this area has presumably already devoured the 130-page document.

But for those who haven’t yet redlined the entire thing, we’re here to help. Below are a collection of the more interesting and helpful tidbits from the guidance.

Defining “Anything of Value”:

In enacting the FCPA, Congress recognized that bribes can come in many shapes and sizes—a broad range of unfair benefits—and so the statute prohibits the corrupt “offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to” a foreign official.

An improper benefit can take many forms. While cases often involve payments of cash (sometimes in the guise of “consulting fees” or “commissions” given through intermediaries), others have involved travel expenses and expensive gifts. Like the domestic bribery statute, the FCPA does not contain a minimum threshold amount for corrupt gifts or payments. Indeed, what might be considered a modest payment in the United States could be a larger and much more significant amount in a foreign country.

Regardless of size, for a gift or other payment to violate the statute, the payor must have corrupt intent—that is, the intent to improperly influence the government official. . . . is difficult to envision any scenario in which the provision of cups of coffee, taxi fare, or company promotional items of nominal value would ever evidence corrupt intent, and neither DOJ nor SEC has ever pursued an investigation on the basis of such conduct. (Page 14-15)

On Gifts, Travel and Entertainment:

A small gift or token of esteem or gratitude is often an appropriate way for business people to display respect or each other. Some hallmarks of appropriate gift-giving are when the gift is given openly and transparently, properly recorded in the giver’s books and records, provided only to reflect esteem or gratitude, and permitted under local law. Items of nominal value, such as cab fare, reasonable meals and entertainment expenses, or company promotional items, are unlikely to improperly influence an official, and, as a result, are not, without more, items that have resulted in enforcement action by DOJ or SEC. (Page 15)

What About “Facilitating or Expediting” Payments?

The FCPA’s bribery prohibition contains a narrow exception for “facilitating or expediting payments” made in furtherance of routine governmental action. . . . Examples of “routine governmental action” include processing visas, providing police protection or mail service, and supplying utilities like phone service, power, and water. Routine government action does not include a decision to award new business or to continue business with a particular party. Nor does it include acts that are within an official’s discretion or that would constitute misuse of an official’s office. Thus, paying an official a small amount to have the power turned on at a factory might be a facilitating payment; paying an inspector to ignore the fact that the company does not have a valid permit to operate the factory would not be a facilitating payment. (Page 25)

Source: Read more from the Wall Street Journal On-Line: Highlights from the Long-Awaited FCPA Resource Guide, Wall Street Journal, Nov 14, 2012

A Resource Guide to the U.S. Foreign Corrupt Practices Act (FCPA), Nov 2012

The Guidance: The FCPA Bar Reacts, Wall Street Journal, Nov 14, 2012

Foreign Corrupt Practices Act (FCPA): An Overview

Anti-Bribery and Books & Records Provisions of the Foreign Corrupt Practices Act.

Các điều khoản Chống hối lộ và Hồ sơ & Sổ sách Đạo luật Chống Tham nhũng ở nước ngoài.

For particular FCPA compliance questions relating to specific conduct, you should seek the advice of counsel as well as consider using the Department of Justice’s FCPA Opinion Procedure, found here.

Posted: Nov 18, 2012Updated: Nov 25, 2012